Laxmi Organic

The quarter was significantly influenced by the Middle East conflict, leading to spikes in feedstocks such as crude and methanol. Acetic acid prices, after falling to $300-320 in the previous fiscal year, saw a large spike from $350-370 in Jan/Feb to over $700 in March/April, before moderating to the current $450-470 range. Ethyl acetate (ETAC) spreads also experienced volatility, moving from approximately $130 in Jan/Feb to $250 in April, now settling at $150-160, which management believes is sustainable for the next 1-2 quarters.

Demand across Pharma, Printing & Packaging, Industrial Solutions, and Pigments segments remained stable in Jan/Feb, with a noticeable spike observed in March. Sequentially, Q4 FY26 saw a 9% revenue growth across both Essentials and Specialties segments, accompanied by margin improvements. For the full year FY26, the Specialties segment's revenue was 'almost flattish' YoY, with an earlier 18% decline attributed to a structural product, deferred shipments, and deflationary feedstock effects, which saw strong recovery in Q4.

The Lote fluorination setup achieved 40-45% of its peak revenues in FY26 and maintains a good order book. The world-scale ethyl acetate line at Lote has commenced operations and customer dispatches. Dahej Phase 1 is operational and supplying the market, while Phase 2 is scheduled for chemical charging in Q1 FY27, with revenues expected to contribute from H2 FY27. The Hitachi project, a multiyear contract, is anticipated to manifest in Q3 FY27, followed by steady qualification and ramp-up.

While logistic costs and vessel availability had moderated in early FY26, the Middle East crisis since March has caused significant disruptions. Management reported that logistics costs have doubled due to multiple surcharges, posing a 'negative drag overall' on operations and impacting profitability.

On a sequential basis (Q4 FY26 vs Q3 FY26), the company achieved 9% revenue growth and margin improvements across both Essentials and Specialties. However, for the full year FY26, revenues degrew by 6% compared to FY25. This degrowth was primarily attributed to margin pressures, a deflationary feedstock environment, and one-time^📎 effects in Specialties. The gross margin profile was under pressure, and employee costs increased by INR 14 crores for FY26, mainly due to new site setups.

The company maintained prudent working capital management, which has been instrumental in enabling investments in growth projects. Management emphasized that their procurement strategy allowed assets to run reliably despite raw material volatility. They refrained from providing specific revenue targets for FY27/FY28, citing the fluid and evolving chemical market backdrop as a reason for caution.

Mr. Amit Jain is set to join as the new CFO on June 16, bringing 30 years of experience from Gharda Chemicals, with expertise spanning corporate strategy, investor relations, and M&A. Additionally, the company's supply chain digitization project, identified as a key transformative initiative, is expected to go live in Q2 FY27, aiming to enhance operational efficiency.